Employer of Record Services: The Basics
In a world where remote hiring is becoming the norm, hiring Indonesian talent can be difficult if your company is based abroad. This is when it could be worth considering an Employer of Record (EoR) service.
As a form of outsourcing, an Employer of Record Indonesia service provider legally bears all the administrative responsibilities of managing a company’s employees. EoR responsibilities include but are not limited to recruitment, payroll, and work permits.
While the Employer of Record service provider legally holds employment contracts, your company would still have autonomy in terms of day-to-day operations. Your company will still make all the final decisions in business strategies as well as employee management and supervision.
Using an Employer of Record in Indonesia
So, when would be a good time to consider using an Employer of Record service? There are a variety of circumstances when expanding your business abroad where having an EoR service provider would be especially helpful.
You’re looking for a more efficient way to enter the Indonesian market
Establishing a foreign-owned business in Indonesia is costly in time and money. If you were to build a PT PMA to hire Indonesian employees, you’re looking at investing IDR 2.5 billion (~ 200,000 USD) in paid-up capital and a timeframe upwards of 6 weeks.
Using an EoR service, your company can hire in Indonesia without registering a company. An EoR service would already have a registered business that can quickly recruit and hire, saving time and money. This is especially useful if you need to expand your workforce in Indonesia quickly when there is higher demand in your business.
You don’t want to worry about the legal responsibilities of hiring
EoR service providers in your target country are knowledgeable about labor laws and policies that are constantly changing. While also making sure your employment affairs are compliant with Indonesian law, your EoR service provider will also make the necessary changes to ensure all your payroll-related activities remain compliant.
Your EoR service provider is also the legal employer of those you hire and bear complete responsibility for your operations in their country, so this mitigates a significant amount of risk for your company.
You’re looking for a simpler recruitment process
Recruiting new employees can be a tedious process, and using an EoR service can heavily simplify it for you through HR outsourcing while you focus on other aspects of your business. Your EoR service provider will handle the recruitment process from start to finish, with your final approval.
If you’re ready to consider Cekindo as your Employee of Record service provider, here is our full list of EoR services to keep in mind:
- Recruitment and Candidate Shortlisting
- Appointments and Employment Agreements
- Payroll processing and Salary Adjustments
- Income Tax Calculations and Reporting
- Employee Benefits and Insurance
- Visas and local sponsorship applications
Thinking About The Future of Your Business
Using an Employer of Record service to set your roots in Indonesia opens the doors to new opportunities in the country. Here are some ways Cekindo can help you push farther into the Indonesian market:
- Set up a company & enter the market on a larger scale if you’re satisfied with how your product or service performs in Indonesia
- Apply for a work permit (aka a KITAS) if you want to work in Indonesia after you’ve set up your company
- Tax and accounting services to facilitate financial reporting as well as the payment of income & corporation tax
- Employee background check
When you’re ready to make the move to hire in Indonesia, do not hesitate to contact a Cekindo consultant to plan your Indonesian debut.